The talent crisis is forcing leaders to look inward and build the stability that retains and develops their best people.
Across Australia, and many other developed economies, leadership teams are grappling with the persistent challenge of talent scarcity. A recent white paper from IBISWorld, "The Bottleneck of Australia's Productivity Potential," gives us a sharp, data-driven picture of the problem, highlighting widespread labour shortages as a primary constraint on economic growth.
The conventional response is logical and necessary: leaders intensify recruitment, adjust compensation, and compete in a tightening market. These external efforts are important part of the equation. Our work suggests that a complementary, internal focus is required for a sustainable solution. A powerful response to external scarcity is to cultivate internal abundance.
In some of us, the immense pressure of the talent market may create a leadership blind spot: a failure to fully invest in such internal abundance - the stability, resilience, and capability of the people we already have. Based on years of research and advisory work with senior leaders, we propose a framework that shifts the focus inward. If we look, our experience might support the evidence that suggests a leader’s ability to create internal stability is a direct driver of organisational productivity and resilience, especially when the market is volatile.
In a seller’s market for talent, a transactional approach to employment is failing. The constant cycle of recruitment and attrition is exhausting and expensive. A more sustainable path appears to be one of stewardship, cultivating employees as valuable assets.
In practice, this means an obsessive focus on creating the conditions for people to do their best work. The foundation of this is psychological safety. When people feel secure, valued, and see a clear path for growth, they are more likely to stay, innovate, and commit their full capabilities. The question for leaders to consider is this: How can we shift our daily focus toward creating an environment where our best people choose to build their careers?
2. Reframe Experience as a Renewable Resource
The IBIS World report identifies an ageing population as a key structural challenge. It’s possible to reframe this demographic trend as an opportunity. An inclusive leadership approach sees deep experience as a renewable resource of organisational wisdom.
This moves beyond simple succession planning to the formal implementation of mentorship and knowledge-transfer programs that ensure the invaluable, tacit knowledge of seasoned employees is systematically passed to the next generation. Such action transforms a potential demographic liability into a powerful engine for learning and continuity, building the capability of the entire organisation from within.
3. Absorb Pressure, Don't Amplify It
Perhaps the most challenging, yet most critical, practice is the leader's own ability to manage pressure. In high-stress environments, it is all too easy for a leader’s anxiety to cascade through the organisation, amplifying pressure and leading to team burnout.
Burnout is a measurable drain on the productivity we seek to improve. My own research on the effectiveness of leadership programs, "Collusion with denial," highlighted a critical finding. We saw that:
...participants who returned to a high-pressure, unsupportive work environment… reported being unable to implement their new learning and in some cases felt that their stress levels had in fact increased as a result of the gap between the new possibilities they could see and the reality of their work. Collusion with Denial
This creates a "knowing-doing gap" that is a direct source of burnout. We invest in upskilling our people, only to place them in an environment that blocks them from applying that knowledge. This friction is a hidden tax on productivity.
Work I complete with Prof Richard Badham, published in Organizational Dynamics, explored the concept of a leader’s stable mind as the antidote. A leader who has cultivated the ability to absorb pressure without reactivity can provide the consistent, grounded support their teams need to sustain performance. In this way a stable calm mind is a direct enabler of productivity. It allows a team to navigate high workloads and maintain standards because their leader provides the ballast.
The IBIS data shows us the reality of the talent market. Our response is critical. The human challenge is to look beyond the immediate scarcity and focus on the latent potential within our teams. This brings leaders to a critical question: “How do we unlock the full capability of the people we already have?” It is in answering this question that we may find a sustainable path to productivity.